The economy has taken a turn for many industries, families, and community assets that people, government, and our children have relied on to build their future in. Many people have heard the story of the Great Depression, but unless you are over the age of 70, you probably did not experience it.
Some industries were still able to capitalize during the Great Depression Era, such as the railroad, textile factories, and steel mills that were set in place to continue on a workforce that supported the development of war, and international power. Sounds a lot like the Political era we just left, but now is a time where the little man, has to learn to make POWER moves.
The first step to understanding whether you can take advantage of the current real estate market will revolve around week 1: Understanding your assets. Simply put, you must know exactly how much you are worth. Everyone has a Dream, but is it realistic!
For the first week, I would like you to survey the three main areas of your life, and determine your OWN self worth-
EVERYTHING: (1.) Career/Job/Education (2.) Household Items/Cars (3)Financial Assets
These are three important areas that must all contain a numerical value that will allow you to continue to grow each area.
If you have been working in your career for 5,10,15 years, what is the minimum salary that you would ever expect to make with your experience? What level of education do you possess, and how much is it worth to you? (ie. I went to a school that costs $25K/year, and I went 5 years, my education is valued for a Bachelor’s at $125K. My Master’s is worth $22K; I have made that more than 5 times in my life so far) Are you set for a promotion, when, how much? What is your spouses income, do you have additional residual income? ( long term/short term)
All these questions lead to the ability for someone to rely on their assets to get them out of financial dilemmas. If an individual knows their current skills will keep S/he at a minimum of $35K a year is important to know, if you are in a position that is likely to be downsized.
All items in your home are an asset. Your television, clothes, stereos, anything YOU OWN. This is an important task, when you purchase a home, the insurance company can compare information from your loan application to your insurance application. the Loan Application asks you to identify the assets you have in your home in a general dollar amount.
If you enter your assets are worth $5K, and then the insurance company asks for an itemization so they may insure you properly, and you now have 42K in assets, that can look a little suspicious, now that you know what that question initially eluded too.
( If you are having a hard time with this exercise, imagine, you come home and your entire home is burned to the ground, but a fairy insurance agent, said we will replace everything you had, if you can roughly detail everything you had. FILM IT, WRITE IT DOWN, Keep this information handy)
What is in your bank, 401K, Savings, Stocks, money markets, etc.? Do you have these, and what can you do to obtain them ( that will be in an upcoming article- Building Tangible Assets).
Document all of this information as accurately as possible. Donald Trump knows how much he is worth, Michael Jackson knows how much he is worth, John McCain knows how much he is worth? How much are you worth?
Have fun with this exercise, how much is your child’s game system worth? The games? Your daughter’s wardrobe? Kids can get involved, it helps them learn to save money as well, and teaches them the process of home buying and building good financial habits.